Study Design: Nursing homes were randomized to the intervention in New York, while the comparison facilities were constructed via propensity score matching in Arizona and Wisconsin. We used a difference-in-difference analysis to compare outcomes across the base-year relative to outcomes in each of the three demonstration years. To provide context and assist with interpretation of results, we also interviewed staff members at participating facilities.

Principal Findings: Medicare savings were observed in Arizona in the first year only and Wisconsin for the first 2 years; no savings were observed in New York. The demonstration did not systematically impact any of the quality measures. Discussions with nursing home administrators suggested that facilities made few, if any, changes in response to the demonstration, leading us to conclude that the observed savings likely reflected regression to the mean rather than true savings.

Conclusion: The Federal nursing home pay-for-performance demonstration had little impact on quality or Medicare spending.